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BitMEX Money Laundering Trial to Begin in March 2022

2 mins
Updated by Kyle Baird
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In Brief

  • BitMEX is set to undergo a money laundering trial on March 28, 2022.
  • BitMEX and its founders are accused of violating the Bank Secrecy Act, KYC, and AML regulations.
  • The exchange has seen a drop in usage and activity.
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The date for the BitMEX money laundering trial has been set to begin in March 2022, 18 months after the charges were first announced.

The BitMEX crypto derivatives platform, which has been on the business end of numerous legal cases, is set to face money laundering charges on March 28, 2022.

BitMEX and its founders had come under the scanner of authorities last year, which roiled the markets. Co-founder and ex-CEO Arthur Hayes, co-founder Benjamin Delo, and CTO Samuel Reed are all facing charges. Gregory Dwyer, BitMEX’s head of business development, is also facing charges but has not appeared yet.

The individuals are accused of violating the Bank Secrecy Act, know-your-customer, and anti-money laundering laws by the Department of Justice and the Commodity Futures Trading Commission (CFTC). Hayes recently surrendered to authorities in early April 2021.

BitMEX is registered in Seychelles, and Hayes allegedly said that it was easier to bribe authorities in the country. Hayes stepped down as CEO in October 2020.

BitMEX is also involved in other lawsuits. One such case was filed by traders Yaroslav Kolchin and Vitaly Dubinin, who claimed that it engaged in market manipulation and unregistered trading. The plaintiffs further claimed that the exchange “looted” $440 million while being aware of the investigation.

BitMEX alive, but lost its former glory

Until the charges were filed, BitMEX was one of the world’s most popular derivatives platforms. However, after being targetted by authorities, users fled the platform, and it has since become a much smaller player in the space.

To assuage some of the authorities, BitMEX had updated its KYC demands. The Department of Justice claimed that the exchange did not implement AML procedures for U.S. traders, which is one of the primary charges against it.

In addition to accelerating the KYC registration, BitMEX also formed a surveillance partnership with Eventus Systems. The AML focused on a collaboration for monitoring transactions. It also announced that it would work with Chainalysis to prevent illicit activity from occurring.

With all of these controversies hanging above it, BitMEX has seen a drop in usage and activity. If convicted, the executives could receive up to five years in prison and $250,000 in fines.

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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
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